Both Sides of the Table

FEBRUARY 23, 2015

Equally, it could be that as a mid-level employee you prefer to see the company try to get to a $1 billion exit where you could make substantial money but the CEO sells early because she is sitting on 10x the equity as you and can earn well on a $50 million exit. There is often money to be made in finding places with under-valued IP.

Technical Review 150

Technical Review Liquidation Preference Silicon Valley IP 150

View from Seed

DECEMBER 4, 2014

Additionally, you should put whatever agreement you reach to paper , even if you have not yet incorporated or had your legal counsel draw up the founder stock paperwork. You can then work with your law firm to formally draw up founder common stock paperwork either then or subsequently. Ideation/IP.

Equity 315

Equity Founder Sweat Equity Cofounder 315

Both Sides of the Table

DECEMBER 27, 2011

If you spent the 3 years perfecting some hugely differentiated technology IP that may also be different. I always remind this to journalists who ask me about public stocks. They got a bigger office space so their employees would feel comfortable and they could improve employee retention.

Startup 418

Startup Revenue Technical Review Flash 418

Both Sides of the Table

APRIL 27, 2010

Moving on … My second post was directed at employees. If you’ve done it for a long time then I usually advise hiring managers to hire you as contractors and not full-time employees. No employees wanted to join startups – they were all looking for stable jobs. It’s a subjective topic.

Venture Capital 285

Venture Capital Hiring Software Review Stock Options 285

Gust

DECEMBER 1, 2011

Notice what is missing from this list of priorities: The company itself – that is, a business entity, most often a corporation , that will own the entire business (however defined), issue equity to founders, take investment capital , enter into contracts, make sales, pay employees and contractors, and so forth. Good stuff!

IP 114

IP Intellectual Property Equity Liquidity Event 114

Agile VC

DECEMBER 4, 2014

Additionally, you should put whatever agreement you reach to paper, even if you have not yet incorporated or had your legal counsel draw up the founder stock paperwork. You can then work with your law firm to formally draw up founder common stock paperwork either then or subsequently.

Cofounder 255

Cofounder Equity Founder Sweat Equity 255

Hunter Walker

MAY 13, 2023

Sometimes you’d even get lucky and receive stock in the acquirer, which was how I gained pre-IPO equity in high growth stars like Pinterest and Facebook. And when they’re giving stock to existing shareholders instead of cash it’s at high 2021 valuations, buried below a preference stack.

Early Stage 117

Early Stage Cap Table Acquisition Sales 117

Agile VC

DECEMBER 4, 2014

Additionally, you should put whatever agreement you reach to paper, even if you have not yet incorporated or had your legal counsel draw up the founder stock paperwork. You can then work with your law firm to formally draw up founder common stock paperwork either then or subsequently.

Cofounder 173

Cofounder Equity Founder Sweat Equity 173

Both Sides of the Table

SEPTEMBER 25, 2010

These days there are many lawyers that will do equity deals cheaply as long is it is a standardized, simplified term sheet, early stage, no serious investor / management debates, limited IP / customers / due diligence and as long as they perceive you as a “hot&# company that’s likely to need legal services for many years ahead. (if

Finance 286

Finance Term Sheet Technical Review Warrant 286

Both Sides of the Table

MAY 2, 2015

And it turns out that employee reviews matter. Stock option top-ups after a few years are vital retention mechanisms. Didn’t have employees sign non-solicitation agreements? Didn’t have employees sign non-solicitation agreements? Legal threats from other IP holders? Shame on you. Shame on you.

Operations 150

Operations Metrics Early Stage Non-Compete 150

Both Sides of the Table

MAY 10, 2015

They were then sued for trademark infringement by a foreign company who had no product, no customers and no employees in the US. He had a stock option vesting program and had vested a significant amount of his stock but not all. Be formal with every employee contract – even with friends. It was a pure shake down.

Vesting 150

Vesting Cofounder IP Stock Options 150

YoungUpstarts

FEBRUARY 28, 2020

Additionally, it will be important to consider whether you plan on attracting investment capital through the distribution of stock, because only certain types of businesses can issue shares of ownership. The major downside of the LLC is that distribution of stock is not permitted, although interests can be assigned (this can get complicated).

LLC 135

LLC Intellectual Property Limited Liability Company Distribution 135

David Teten

MARCH 14, 2018

Andreessen Horowitz’s compromise: they have a half-dozen “ board partners ” who serve on the boards of their portfolio companies, representing A16Z, but who are not full-time employees of A16Z. Typically they get cofounder common equity, in addition to the preferred stock that a conventional VC gets. Previously posted on PEHub.

Private Equity 60

Private Equity Venture Capital Equity Cofounder 60

Growthink Blog

SEPTEMBER 13, 2017

And putting out there the “story” behind the numbers - the talent, work ethic, and integrity of our people, the suredness of our IP, the thoughtfulness of our product development roadmap, the sustainable competitive advantage of our operational cost structure, and the like.

Harvest 48

Harvest IP Software Review Forecast 48

Both Sides of the Table

FEBRUARY 10, 2011

There are personal factors that come into play like real estate value, stock market activity, etc. Co-founders/employees (0:43:47) : Pick a co-founder who is better than you and pick employees who are better than you. Ultimately running a company is about connecting with human beings: your employees, customers, investors.

Angel Investor 302

Angel Investor Cofounder Southern California .Net 302

Both Sides of the Table

SEPTEMBER 18, 2014

If you’re wildly successful early on or if they help you achieve a great valuation they actually pay a significant price for their eventual stock even though they took much more risk than a future investor and backed you early. Less than you’ll probably grant your most junior employees in stock options? And so forth.

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

www.seriesseed.com

DECEMBER 9, 2012

Locks in rights, preferences and priviledges of the stock. It would be helpful to get a California standard employee manual, employee contract/agreements, IP ownership release to company, and confidentiality. it is acquired) and (b) the employee is terminated without cause (or sometimes resigns for good reason).

Finance 40

Finance Term Sheet Vesting LLC 40

Scott Edward Walker

NOVEMBER 2, 2011

Button-down IP ownership and assignment issues (see post here ). If you hire any employees, make sure you don’t misclassify them as an independent contractor or fail to pay them at least the minimum wage (see post here ). Set-up vesting schedules for the founders (see post here ) and file 83(b) elections with the IRS (see #3 here ).

Accredited Investor 111

Accredited Investor Stock Options Delaware Silicon Valley 111

Gust

DECEMBER 8, 2011

Determine the allocation of equity among co-founders, early employees or other service providers, and future contributors as applicable, as well as the vesting schedule , if any, that will apply. Make escrow arrangements for restricted stock (i.e., Pick a name for the new legal entity (e.g., Newco, Inc.”) Yes, it’s a mouthful.

Intellectual Property 139

Intellectual Property Non-disclosure Agreement Delaware Stock 139

YoungUpstarts

SEPTEMBER 4, 2017

Investing in startups is a lot more than just buying “stock” in a company. However, if a company is not going so well is there any way you can help engineer an acquihire or potentially sell off some of the company’s IP on the way out. by Paul Towers, founder & CEO of Task Pigeon.

Pre-Money Valuation 137

Pre-Money Valuation Seed Stage IP Deal Flow 137

SVPG

SEPTEMBER 30, 2016

Hate mail started streaming in from everywhere - including emails directly to Bill Gates who would forward them on to the team with messages like "this is depressing MSFT's stock price. But back in 1999, a then very young Netflix based in Los Gatos with less than 20 employees, was on the edge of going bust. NETFLIX – Kate Arnold.

Product 60

Product Technical Review Software Review Engineer 60

Scott Edward Walker

DECEMBER 13, 2018

The deal is typically structured as an asset purchase (as opposed to a stock purchase or merger) — though the acquirer often does not actually want the startup’s IP and/or other assets. The appeal from the startup’s perspective is a “soft landing.”. How is the Deal Structured?

Founder 45

Founder Merger IP Liquidation Preference 45

www.paulgraham.com

OCTOBER 23, 2010

The way to getrich from a startup is to maximize the companys chances of succeeding,not to maximize the amount of stock you retain. The problem is, for the company to exist, you have todecide who the founders are, and how much stock they each have. Before you consummate a startup, ask everyone about their previous IP history.

Startup 105

Startup Cofounder Software Stock 105

Gust

SEPTEMBER 17, 2014

If you’re wildly successful early on or if they help you achieve a great valuation they actually pay a significant price for their eventual stock even though they took much more risk than a future investor and backed you early. Less than you’ll probably grant your most junior employees in stock options? Stock Option plans.

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

Austin Startup

AUGUST 20, 2017

Startups often hand out shares, options, and warrants for employees and for contractors rendering needed services. Between day one and your first confrontations with those issues, particularly if you’ve raised any outside capital, you will have formed a board and stocked it with people you can really get to work on your behalf.

Technical Review 48

Technical Review Software Review Cap Table Securities and Exchange Commission 48

Hippoland

APRIL 10, 2016

Ada is my professor, and we are using her lab, and the company is based on her research, though the IP is assigned to the company. This means that you earn your stock ownership linearly over the period of 4 years. After 1 year, you earn 25% and thereafter, you earn the remaining stock on a monthly basis.

Cofounder 48

Cofounder Cap Table Equity Vesting 48

mashable.com

AUGUST 31, 2010

Now that we’re nearing the home stretch of 2010, it’s a good time to take stock of various odds and ends for your business. And as state offices grapple with budget shortfalls and employee cuts, wait times will only get longer. SCVNGR Makes Major Enhancements to iP. Follow her on Twitter @corpnet and Facebook.

LLC 75

LLC Social Media Startup Philadelphia 75

Startup Company Lawyer

JULY 20, 2009

Incorporating a company and issuing stock to the founders will help prevent misunderstandings among the founders about equity splits. If there is any IP created and there is more than one founder, then incorporating an entity and assigning IP to the entity is important. Hiring employees or third party contractors.

IP 67

IP Stock Options Preferred Stock Capital Gains 67

mashable.com

AUGUST 31, 2010

Now that we’re nearing the home stretch of 2010, it’s a good time to take stock of various odds and ends for your business. And as state offices grapple with budget shortfalls and employee cuts, wait times will only get longer. SCVNGR Makes Major Enhancements to iP. Follow her on Twitter @corpnet and Facebook.

LLC 75

LLC Ruby Social Media Startup 75

Tim Keane

JANUARY 12, 2010

Term-sheets for preferred stock offerings are designed to protect the investor in case things don’t go as well as planned.   Say I invest $1MM in a company and receive 40% of the stock. These include: ·       Vesting of Founder Stock.   Why is this fair?

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

mashable.com

OCTOBER 16, 2010

SCVNGR Makes Major Enhancements to iP. It's a unique approach, and one we'd love to discuss with entrepreneurs and their investment sources. Apple Declared "Marketer of the Decade" This iPhone 4 Costs $8 Million Next Apple Event Goes "Back to the Mac" View More » Mobile Starbucks Stores in New York Now Acce.

Angel Investor 84

Angel Investor Venture Capital Social Media Technical Review 84

mashable.com

OCTOBER 16, 2010

SCVNGR Makes Major Enhancements to iP. It's a unique approach, and one we'd love to discuss with entrepreneurs and their investment sources. Apple Declared "Marketer of the Decade" This iPhone 4 Costs $8 Million Next Apple Event Goes "Back to the Mac" View More » Mobile Starbucks Stores in New York Now Acce.

Angel Investor 83

Angel Investor Venture Capital Technical Review Social Media 83

Scott Edward Walker

OCTOBER 27, 2015

Button-down IP ownership and assignment issues (see post here ). If you hire any employees, make sure you don’t misclassify them as an independent contractor or fail to pay them at least the minimum wage (see post here ). Set-up vesting schedules for the founders (see post here ) and file 83(b) elections with the IRS (see #3 here ).

Intellectual Property 40

Intellectual Property Accredited Investor Vesting Delaware 40

www.vccafe.com

MARCH 11, 2013

IP Location Tools. BambooHR -Â Employee Records, Benefit Information, Payroll Data, etc. British Library Business & IP Centre : Funded by the London Development Agency, the British Library supports inventors, small businesses and entrepreneurs from that first spark of inspiration to successfully launching and developing a business.

Software Review 53

Software Review Technical Review Startup 53

Duct Tape Marketing

FEBRUARY 11, 2020

John Jantsch: We haven’t talked about employees. Again, I know you’re working with maybe a lot of solopreneurs, but so maybe if it’s even the virtual, part-time employee, where do you see employee issues coming up in the legal space? That could be IP addresses. Jamie Lieberman: It’s funny.

Small Business 86

Small Business Non-Compete Intellectual Property New York City 86

blog.simeonov.com

FEBRUARY 22, 2010

This can be a convenient shortcut to separate someone’s status (founder) from their role (employee or contractor or advisor, etc.) It outlines key points of agreement between founders around IP ownership, equity ownership, vesting, etc. As long as the decision is public and definitive, from an external perspective there is no issue.

Founder 44

Founder Vesting Agile Startup 44

Steve Blank

MAY 4, 2009

My way of explaining our support and service role to the marketing department was that: Sales is the sharp end of the stick, and marketing at best, is the stick. But while the sales team works for commission, the rest of the employees have equity (stock) in the company. No one was confused after that. Who’s on the Sharp End?

Silicon Valley 126

Silicon Valley RSS Non-Compete California 126